What Are The Alternative Investments In Real Estate

For most people interested in real estate investment, there is a limited set of conventional asset classes known to them. Unfortunately, most of these asset classes and investment strategies require huge capital. And that’s the intent behind an active search for alternative investments in real estate. 

Perhaps, you want to explore new alternatives beyond what you know now. 

That’s precisely what this post will give you. Interestingly, you may be surprised that you have what it takes to get started with some of the real estate investment strategies discussed here. 

Beyond what is known to you now, most of the investment options discussed here are well known to deliver significant ROI. From another perspective, it is safe to say that the most popular real estate investments are hardly the most profitable. Without the considerable entry barrier, you may want to consider some of the alternative real estate investments discussed below. 

Some types of Real Estate Alternative Assets

Tokenized Real Estate

Following technological advancements, real estate becomes an alternative asset and is tokenized to lower investment barriers while creating wealth for investors. But hey, if it sounds like a confusing buzzword, don’t worry. We’ll get to the basics and how it might benefit you. 

What is tokenized real estate?

It is a defined real estate asset ownership unit represented with a digital token. The term token and tokenization originated from the world of blockchain technology and cryptocurrencies. On the other hand, a digital token is a unit of value that can be exchanged for something else or traded like other goods and services. Through tokenization, high-value real estate properties are broken into smaller chunks or units of ownership. But this time, it is represented in a digital form of stored value. 

In this case, real estate properties are represented as debt and equity offers issued by registered and reputable corporate entities. Because real estate properties are represented in small chunks, some individuals and families can start investing with as little as $1,000 or less. 

Real Estate Crowdfunding Websites 

Real estate crowdfunding is an alternative form of real estate investing through the process of leveraging technology to engage many people to invest smaller amounts while raising capital at the same time. Real estate crowdfunding works through a website created for deal aggregation and portfolio management. Both retail investors and property developers often benefit from crowdfunding websites. 

On the side of property developers, it is easier to raise investment through many people investing small amounts. Retail investors can also benefit from the low investment requirements and potential profits. 

You can take advantage of this alternative real estate investment by starting your crowdfunding website or choosing one and investing your money. Inside such websites, the terms of each deal are usually clarified for everyone to understand. 

Best real estate crowdfunding websites in the US. 

  1. REI Capital Growth
  2. Fundraise
  3. PeerStreet
  4. CrowdStreet
  5. RealtyMogul 
  6. Equity Multiple 

Sign up with any of these websites, and you’ll find out the minimum required capital. 

Manufactured Homes 

Even though there are technical differences, mobile homes and manufactured homes are worth considering as alternative real estate investments. Depending on your option, these homes can be fixed permanently on suitable land or built on top. 

However, the most interesting thing is that you can build and rent these homes for long-term profit. 

When you take size variation and other factors into account, these homes can cost between $45,000 and $200,000 in the United States. When the quality is high enough, you may decide to buy, hold and resell these types of transportable homes. 

Co-Working Spaces 

For this specific real estate investment option, you can start with REITs primarily focused on co-working spaces. Based on the growing popularity of remote work, the demand for co-working spaces will continue to rise over time. When you look at some co-working space statistics, you’ll understand why the demand is not slowing down anytime soon. 

The Instant Group estimated that the market will grow by 21% within 2022 and beyond. 

If you can build up capital to get into this space, you’ll be smiling to the bank very soon. To get started quickly, try to explore some of the real estate project financing alternatives proven to work for other people like you. 

One thing is very certain. The rising trend toward remote work will accelerate the demand for co-working spaces. Moreover, the rental income is proven to be a steady type. 

Final Thoughts On Alternative Real Estate Investments

Even though real estate is one of the oldest forms of dependable investment in any economy, you don’t have to follow the traditional routes known to the masses. In this post, you now have a set of investment options worth exploring as soon as you want. Interestingly, you don’t need a massive amount of capital to get started with some of these alternative real estate investments. The point is that you can start with what you have now.